Connecting the Real Estate Community

Posts Tagged ‘
REO ’

First Look Program

Fannie levels the field

New Incentives Fannie Mae markets its REO through its HomePath.com Properties. Under the new incentive program, owner occupants and public entities that buy a HomePath Property between now and December 31, can receive up to 3.5% of the purchase price in closing cost assistance. The sale must close within 60 days of acceptance of the offer and no later than December 31, 2010. The incentive must be requested in the initial offer.

What Is It Individuals and public entities are given a period of time, generally 15 days after a property is listed at HomePath.com (a Fannie Mae site). HomePath.com is the listing site for about 190,000 properties held by the GSEs. Individuals and public entities (read non-profits) have a lead time over investors to inspect and submit an offer to purchase. After 15 days, the listing is open to all potential buyers.

The idea is to offer first to those who would live in the home and become stakeholders, adding stability to the community and to avoid too quickly putting property back into a supply laden market. By offering a sneak preview to owners first, Fannie hopes to encourage home ownership without the edge professionals may have and avoid the pressures of bidding against professional investors.

Why Should I Care Levels the playing field and it’s working.

Fannie has moved more than 29,000 homes out of its owned real estate portfolio of properties acquired by the through foreclosure to owner occupants. Some 800 non-profits have also bought an additional 5,000 properties through First Look.

I’ve sold a ton of REOs (Real Estate Owned homes – foreclosures) to first-time homebuyers – many of whom I’ve met through HomeGain.com. Before we start looking at homes, I take time to meet with them and explain the entire process in as much detail as necessary. I hate surprises, and I’ve discovered buyers don’t like them either. I want my clients to fully understand the process so they know what to expect once we hit the streets.

In the process, I’ve discovered a sad truth. No amount of discussion or explanation ahead of time can adequately prepare prospective buyers for the process of trying to buy an REO in the current market.

I recently came across a video that so perfectly sums up the process of buying an REO – I decided I have to share it with you. As I watched it for the first time, I discovered I was unsure how to respond … should I laugh … or cry …

You decide.

For additional musings on REOs, also read:

Top 10 Things I HATE About REOs: AND 3 Startling Consequences

How To Buy An REO – Top 17 Questions Answered

Bank Tactics Causing Repeat Of Crash Conditions in San Francisco Bay Area

Thanks to San Diego Castle Realty and Kris Berg for producing the video!

Well, I am finally beginning to see some hope that we have weathered the worst of this real estate storm.

The numbers are increasing for buyers in the Orange County and Riverside, California area. I have had to chase buyers by opening up a new office in the Riverside area. The Orange County market was confined to REO listings and buyers being stamped out by multiple offers on every bank owned property.

Unless the buyer could come in over asking price and with a desirable loan most Realtors were wasting theirs and their clients time.

I am still very busy in the Riverside area. REO homes are still plentiful and fairly easy to get. Some banks are still paying closing cost and offering high commissions to Realtors. I have completely stopped taking private listings in Orange County because of the REO competition. Now, however, I have started up again due to the numbers finally falling for foreclosures.

I have learned a lot by sticking it out and not quitting. I feel the agents that have stayed are very lucky to have gained the experience and adaptability that will ultimately lead them to their future success.

We have all had to toughen our shells a bit but, the future looks brighter for all.

It’s no common secret that the real estate market over the past year has continued to dramatically change towards a market concentrated in short sales, foreclosures and REO’s.

For those of you that don’t know what REO means — it means Real Estate Owned. It’s a term used to identify a property is owned by a bank. Banks actually consider REO’s a liability instead of an asset because they are in the MONEY business not real estate business.

As a Top Selling Team in Tampa and St Pete, we have modified our business to help service these “niche” markets. In the first quarter of 2009, nearly half of our business was selling (either listings or homebuyers) distressed properties. We have learned through much education, courses, certifications, and trial and error the best ways to represent buyers and sellers in these specific situations.

If you are a Realtor and haven’t started working these markets — WAKE UP! If you are in a market that has not been hit as hard with foreclosures, don’t worry its coming. It’s time to prepare now.

If you are a new real estate agent, read up! I had a new agent join our team this week and just like I’d send this information to a prospective home buyer, I wanted to review it and tailor it to him so he understands the urgency needed to work buyers on bank owned houses.

Michael Gwynn is a student of real estate. Although he holds a California Real Estate License and multiple investment properties, Michael is currently immersed in the world of online marketing solutions that connect real estate agents and brokers with home buyers and sellers as the Sales Director at www.HomeGain.com.

In today’s world there are many financial casualties associated with the failing real estate market. There are many homeowners who purchased properties and had little knowledge, experience, or insights into the real estate market. But, there were also a number of real estate investors that could have and should have known better. These good investors had experienced bad outcomes with their property purchases because of the lures, pitfalls, and hazards associated with the world of real estate. These lessons are important to learn because there are many new and experienced investors jumping back into real estate in 2009.

Those who do not learn history are destined to repeat it.

There were several factors and causes for these bad outcomes for these good investors. Some were lured by the gains reported in many publications. Others succumbed to the attractive sirens of the real estate Guru’s.

There were those who did not understand the order of purchasing investment property because they purchase equity growth properties before income properties.Many purchased at the peak of the price points. Other wanted only to stay in their local markets. Miscalculations were made on the costs for holding properties.

The potential issues of holding property were never realistically expected or prepared for by the property purchasers. Methods to truly analyze a real estate market and economy were not effective.Technology and available information was not used to its best potential. Real estate professionals were seen as the enemy and not used appropriately in the transactions. Many did not understand the cycles involved in real estate. Continue reading this post

Although, in Shakespeare’s words, “All the world’s a stage,” in the world of theater, a play is rather hard to enact without a stage. It’s been tried over the years, but traditional theatergoers prefer a conventional stage.

And so do homebuyers.

GREAT. Yet another blog on staging, you say. One more appeal to get sellers to pay money they don’t have to sell their home in a market that’s upside down like the Poseidon. Why bother? Haven’t we heard it all?

In the immortal words of Bullwinkle the Moose, “BUT WAIT! There’s more!”

The three pillars of a successful sale are: Preparation, Promotion and Price. Of the three legs, price is without question the most important of the three. Using the Pareto Principle, price actually accounts for 80% of a successful sale. Currently, discount pricing reigns supreme as REOs are flooding into the market like water through the cracked levees of New Orleans. How can a normal seller HOPE to float a normal sale against the incoming surge of lower priced homes?

Believe it or not, there are buyers out there who don’t want an REO.

They aren’t “handi” types. They don’t have the will or desire to “make the house their own.” They can’t “see the potential” and quite frankly, aren’t interested. And not everyone has the Martha Stewart gene for using a twisted fork as a curtain tieback. Many of these buyers are actually willing to pay more to buy a nice house that’s ready to move into.

Recent Comments

HomeGain Real Estate Blog is a publishing tool for posting real
estate opinions, news, data, ideas, and information. Real estate agents and
brokers can find new blog posts daily and subscribe to receive an email based
blog newsletter. Blog article categories include Realtor® best practices,
strategies for reaching home buyers and sellers, web site and online marketing
tactics, social media, real estate technology, real estate trade shows, MLS,
real estate market trends and HomeGain. The opinions expressed by the bloggers
and those providing comments are theirs alone and may not reflect the views or
opinions of HomeGain. HomeGain is not responsible for the accuracy of any of the
information supplied by the bloggers or those who comment.